Royal Mail confirmed today that the price of a First Class stamp for a standard letter weighing up to 100g will rise by 2p to 34p from 2 April 2007, in line with the four-year price control set by postal regulator Postcomm in March 2006.

The price of a First Class stamp for a large letter up to 100g will rise by 4p to 48p.

The price of a Second Class stamp for a standard letter up to 100g will rise by 1p to 24p. The price of a Second Class stamp for a large letter up to 100g will rise by 3p to 40p.

Lorna Clarkson, Royal Mail’s Director of Commercial Policy and Pricing, said: "Now that the UK mail market is open to full competition, it is essential that Royal Mail’s prices more closely reflect the true cost of collecting, sorting and delivering around 80 million items of mail a day to 27 million addresses across the UK.

"The price of a First Class stamp in the UK remains lower than almost any other European country, representing great value for customers sending stamped mail to arrive the next working day after posting."

The price of business mail services will rise at a lesser rate than stamped mail. First Class franked mail and items carrying a printed postage impression (PPI) will attract a 2p discount for items up to 100g. The same discount will also apply to Second Class franked and PPI mail.

For the first time, international franked mail will attract a discount compared to the price of international stamped mail. At the basic 20g weight step, a franked item sent from the UK to Europe will cost 47p, against 48p for a stamped letter.

Prices will continue to decrease for heavier weight items, which will support the growth of the online retail market. Royal Mail is also offering business customers discounts for machineable mail, and the thresholds for volume discounts have been lowered for some business mail services to enable more customers to benefit.

"In a commercial world, we are committed to offering discounts to customers who give us mail that can be sorted by our machines, rather than by hand. These items cost us less to handle so it’s right that we reflect this in the prices we charge those customers," explained Ms Clarkson.

"However, business mail continues to heavily subsidise mail sent by customers, such as personal letters and birthday cards. Stamped mail made a loss of £237 million in the 2005-06 financial year, equivalent to 6p on every First and Second Class stamped letter. At the same time, profitable business mail is being targeted by competitors who will handle around 2.5 billion unstamped business items this year," she added.

"This underlines the need for Royal Mail to continue to rebalance its prices in line with costs, and supports our new pricing system introduced in August 2006 where postage is based on the size and weight of an item. Under this system, which is revenue neutral for Royal Mail, over 80% of all mail is currently the same price or cheaper to send. Customers have adapted to the new system extremely well," Ms Clarkson concluded.